Additional Payments Provide Big Mortgage Savings

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Paying consistent extra payments toward the principal balance provides enormous savings. People make this happen in several different ways. Making a single extra payment once a year is likely the easiest to track. If you can't pay an extra whole payment in one month, you can divide your payment by 12 and write a check for that additional amount monthly. Finally, you can pay a half payment every other week. These options differ slightly in reducing the total interest paid and shortening payback length, but they will all significantly shorten the length of your mortgage and lower the total interest paid over the life of the loan.

Additional One-time payment

Some folks can't manage extra payments. Keep in mind that most mortgage contracts will permit you to make additional payments to your principal at any point during repayment. Any time you get some unexpected cash, you can use this rule to make a one-time additional payment toward mortgage principal.

If, for example, you receive a very large gift or tax refund four years into your mortgage, you could apply a portion of this windfall toward your loan principal, resulting in huge savings and a shorter loan period. Unless the loan is very large, even a few thousand dollars applied early can yield huge benefits over the life of the loan.

First Capital Mortgage can walk you the mortgage process. Give us a call: 2815651246.